Asia’s currencies struggle while the euro, sterling rally

Asian currencies fell, with India’s rupee touching a record low, on concern US policymakers will pare stimulus that has driven inflows to emerging markets.

The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most active currencies, dropped 0.2 percent to 116.74 and was 0.7 percent off a nine-month low reached on Tuesday.

“Asian currencies and assets remain vulnerable as speculation of a reduction in [US] quantitative easing is still lingering,” Tsutomu Soma, manager of Rakuten Securities Inc’s fixed-income business unit in Tokyo, said on Friday.

The Philippine peso led the week’s declines, retreating 1.3 percent to 42.805 per US dollar in Manila, data compiled by Bloomberg show. The Indian rupee fell 0.8 percent to 57.5287 per US dollar and the South Korean won declined 0.8 percent to 1,126.25.

Although the US dollar fell against the New Taiwan dollar on Friday, shedding NT$0.192 to close at NT$29.970 as traders reacted to the strengthening of the Japanese yen and South Korean won, the NT dollar weakened 0.3 percent for the week.

While Taiwan’s central bank stepped in again to slow the pace of the NT dollar’s appreciation, it did not appear to intervene as aggressively as it had in recent sessions during which the bank pushed the greenback above the NT$30 mark, they said.

The yen breached ￥95 to the US dollar on Friday after the minutes of the Bank of Japan’s latest policymaking meeting revealed concerns by some board members that the bank’s move to ease liquidity could destabilize financial markets.

The yen strengthened 3.3 percent this week to ￥94.31 per US dollar in New York and touched the strongest level since April 4. Japan’s currency appreciated 2.6 percent to ￥125.60 per euro. The euro gained 1 percent to US$1.3347.

The baht gained 0.2 percent this week to 30.57 per US dollar, halting seven weeks of losses.

Brazil’s real lost 0.9 percent versus the US dollar while South Korea’s won dropped 0.8 percent as the biggest weekly losers.

After the yen, the biggest gainer was New Zealand’s dollar, which added 2 percent.

The euro rallied against its US counterpart for the fourth-straight week, the longest stretch since September last year.

The eurozone economy may shrink 0.6 percent in the third- quarter and grow 0.1 percent in the last three months of the year, according to a Bloomberg survey.

Meanwhile, sterling advanced 0.8 percent in the week to US$1.5684 on Friday. It rose to US$1.5738 on Thursday, the strongest level since Feb. 11. Sterling was little changed at ￡0.85 per euro.

The British currency has gained 3.9 percent in the past three months, the best performer among the 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. The US dollar fell 0.6 percent and the euro appreciated 2.2 percent.

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